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HIV%20and%20AIDS%20The%20Business%20Case

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males : 49 43 38. Even If you're not INFECTED, you will be ... Captive audience. Huge coverage of the population. Can be an enabling environment. Skills ... – PowerPoint PPT presentation

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Title: HIV%20and%20AIDS%20The%20Business%20Case


1
HIV and AIDS The Business Case
Stephen Kramer
2
  • STATUS QUO gt FUTURE WITHOUT INTERVENTION briefly
  • THE PARTICULAR NATURE OF HIV AIDS briefly
  • BUSINESS THE EPIDEMIC briefly
  • MACRO-ECONOMIC IMPACT
  • SECTORAL IMPACTS
  • CASES Oil Industry, Financial Services,
    Manufacturing

3
Future Shock - No Intervention Scenario
!!Projection based on Metropolitan Doyle Model
  • Percentage of SA workforce (16-59) HIV
    19.36 22.35 24.08
  • Percentage of SA workforce AIDS
    sick 1.17 1.98 2.91
  • New AIDS cases p.a. 296 000 397 000 541 000
  • Number of AIDS orphans 300 000 1 000 000 2 000
    000
  • Life expectancy females 51 43 37
    males 49 43 38

4
SA Provincial ANC HIV Prevalence
5
The nature of HIV andAIDS
6
Typical course of HIV infection
7
Business the epidemic Intervention ?
8
Direct cost of AIDS - No Intervention
  • Escalating costs Medical Schemes
    Life/Disability Cover
  • Could add 13 to remuneration budget of a company
    by 2005 and 26 by 2010 - possibly more depending
    on employee profile or
  • Halve benefits by 2005 and reduce to one-third by
    2010

9
Illustrated Impact on Employee Benefits
10
Adult mortality rates - no intervention !!
11
Indirect cost of AIDS - No intervention
  • Could add 10 to remuneration budget of
    manufacturing company by 2005 and 15 by 2010

Management and Labour Meetings 20
Loss in turnover / profit 45
Legal Costs 10
Motivation / Productivity Loss 5
Sick / Compassionate Leave 10
Recruitment / Training 10
12
Factors affecting revenues
  • Less disposable income
  • Shrinkage of target markets
  • Change in spending priority

Source MetAM
13
Factors affecting costs
  • Medical aid costs
  • Pension benefit costs
  • Cost to company package
  • Employee responsibility
  • Impact on expense line
  • Maintenance of living standards
  • Social responsibility

Source MetAM
14
Factors influencing impact on costs
  • Employee risk profile
  • Medical and risk benefits
  • Skill levels
  • Geographical distribution
  • Industry and labour intensity
  • Turnover rates
  • MANAGEMENT OF THE PROBLEM

15
Business as a context for intervention
  • Captive audience
  • Huge coverage of the population
  • Can be an enabling environment
  • Skills
  • Going concern - programs have continuity/sustainab
    ility

16
Macro-economic impact
17
Macro-economic impact
  • GDP increasing more slowly (less 0.3 pa)
  • Deepening of technology
  • Investment negative now gt slightly positive
  • Spending negative
  • Inflation higher
  • Interest Rates higher
  • Savings negative in longer term

18
Socio-economic impact
  • Poverty will increase
  • Income inequality will increase
  • Diversion of spending
  • Orphans
  • Skills loss in economy
  • Move to capital intensive production
  • Population effect offsetting GDP effect
  • Per capita income ?

19
Sectoral impact
20
Sectors affected negatively
  • Consumer sector
  • Fixed investment industries
  • Tourism ??

Source MetAM
21
Sectors less impacted
  • Technology
  • Media
  • Telecommunications
  • Luxury goods

Source MetAM
22
AIDS Risk Assessment
Source MetAM
23
CASE Oil Company
24
Demographics - Province - Oil Company
  • 1800 from other African countries with severe
    epidemics

25
Demographics - Race - Oil Company
26
Demographics - Gender - Oil Company
27
Demographics - Age - Oil Company
28
Demographics - Earnings - Oil Company
29
Projections - HIV - Oil Company
30
Projections - AIDS Deaths - Oil Company
31
Projections - Death Benefit Costs - Oil Company
32
Projections - Management Costs - Oil Company
  • Assumptions 4 days of a managers time are
    required for every death average manager salary
    for 3 highest grades used

33
Projections - Productivity Costs - Oil Company
  • Assumptions for every death 20 people lose 5
    days worth of productivity, people affected are
    at the same salary scale as the person dying

34
Projections - Recruitment Costs - Oil Company
  • Assumptions 15 of annual salary to recruit
    salary the same as person being replaced

35
Projections - Recruit Productivity Costs - Oil
Company
  • Assumptions new person is 60 productive for 6
    months

36
Projections - Sick Leave Costs - Oil Company
  • Assumptions 2.5 extra days being taken per year
    by HIV Positive people 27.5 days additional for
    AIDS sick people 2.5 days per year as baseline

37
Projections - Medical Costs - Oil Company
  • Assumptions ARV at R16000 per annum Each AIDS
    death costs R26600 in South Africa and R27000 in
    the rest of Africa No dependents may access the
    benefits

38
Projections - Total Costs - Oil Company
39
Projections - Total Costs - Oil Company
40
CASE Financial Services
41
Demographics - Province - Financial Services
42
Demographics - Race - Financial Services
43
Demographics - Gender - Financial Services
44
Demographics - Age - Financial Services
45
Projections - HIV - Financial Services
46
Projections - AIDS sick - Financial Services
47
Projections - Mortality - Financial Services
48
Projections - Death Benefits - Financial Services
49
Projections - Medical Benefits - Financial
Services
  • Assumptions Assume R16000 for ARV pa R25000 per
    AIDS death

50
Projections - Death Medical - Financial
Services
51
CASE Retail
52
Downmarket retail
  • Minimal benefits for most staff
  • Head office staff AID for AIDS, low risk group
  • Shop floor staff mainly informal training
  • Excess capacity amongst shop floor staff
  • Business reason for intervention almost
    non-existent
  • Main reason for intervention is social
    responsibility

53
CASE Sugar Mill
54
Sugar Mill
  • Cost calculations based on records
  • Days lost prior to ill-health retirement 27.7
  • Total cost per worker going on ill health
    retirement R 9544

55
Conclusion
56
Intervention Framework - where are the leverage
points ?
57
Most important factor what a company IS doing .
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